Pāpāgni is a compound of the words pāpa (meaning sin) and agni (meaning fire). According to legend a king who once killed an innocent tribal chieftain of the Chenchus, who live in this region, was afflicted by leprosy as punishment for his sin. He was supposedly cured of the affliction only after he undertook penance in the Papagni valley and took a dip in the river upon which the river is said to have turned his sins to ashes thus acquiring for itself the name Pāpāgni.
The river has faced serious damage in recent years due to various human activities. Unregulated and excessive sand mining in the riverbed has led to falling groundwater levels in the river basin, besides damaging civil structures on and near the river and has led to both a deepening of the riverbed and deterioration in the quality of groundwater. Restoration activities under the Foundation for Ecological Security through community participation towards maintenance of check dams, curbing grazing and felling of trees has however led to a revival of the river leading to rising groundwater levels and an increase in tree cover. The success with the Papagni is now being seen as a possible model for the rejuvenation of the Arkavathy river in Karnataka.